$1 billion in refunds awaits 2007 tax non-filers

Refunds totaling more than $1.1 billion may be waiting for nearly 1.1 million people who did not file a federal income tax return for 2007, the Internal Revenue Service says.

However, to collect the money, a return for 2007 must be filed with the IRS no later than April 18, 2011.

The IRS estimates that half of these potential 2007 refunds are $640 or more.

In Washington state, 28,200 individuals who did not file a 2007 return could qualify for refunds, with the median amount of $702, the agency said. In Idaho, the numbers are 4,600 individuals and a median refund of $540.

Some people may not have filed because they had too little income to require filing a tax return even though they had taxes withheld from their wages or made quarterly estimated payments. In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim a refund within three years, the money becomes property of the U.S. Treasury.

For 2007 returns, the window closes April 18. The law requires that the return be properly addressed, mailed and postmarked by that date. There is no penalty for filing a late return qualifying for a refund.

Taxpayers seeking a 2007 refund will see their checks held if they have not filed tax returns for 2008 and 2009. In addition, the refund will be applied to any amounts still owed the IRS, and may be used to offset unpaid child support or past due federal debts such as student loans.

Current and prior year tax forms and instructions are available on the Forms and Publications page of IRS.gov or by calling (800) 829-3676.

Free tax workshop March 16

The Washington State Department of Revenue will host a free workshop for new and small business owners March 16 in Spokane.

Participants will learn about state excise taxes, reporting classifications, deductions, tax incentives, sales tax collection and record-keeping requirements. All will receive a workbook and reference guide to department rules and regulations.

The workshop will be from 8:30-11:30 a.m. and from 1:30-4:30 p.m. It will be held at 1330 N. Washington St., Rock Pointe III, 3rd Floor, Conference Room A.

To register, visit www.dor.wa.gov or call (509) 327-0200. Space is limited.

Idaho grocery credit refund available to all

Idaho residents who don’t normally make enough to file an income tax return still can get a refund of the grocery tax credit for 2010.

The tax credit, which offsets the sales tax on groceries, is $70 for residents who aren’t required to file an income tax return as well as $70 for each of their dependents. Residents 65 and older get $20 more.

To qualify, residents must have lived in Idaho during the entire year. If they received federal food stamps or were in jail for part of the year, their refunds will be reduced.

Last year more than 65,000 residents not required to file a return filed for a grocery credit refund.

Visit tax.idaho.gov or call (800) 972-7660 for more information.